Budget Deficit Growing Ahead of Tax Cuts

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The federal budget deficit is expected to grow as the $1.5 trillion tax cut begins to kick in this year, but it got a running start this past fall, before the tax bill had taken effect.

According to Bloomberg, “The U.S. budget gap rose 7 percent to $225 billion in the first quarter of the government’s fiscal year from a year earlier, the Treasury Department reported on Thursday. Spending rose at a slightly higher pace than revenue, increasing 5 percent to $994.5 billion between October and December. Receipts gained 4 percent to $769.5 billion.”

The widening gap was driven by increased spending on defense, Social Security and hurricane relief, according to the Congressional Budget Office.